BUILDING COMMUNITY: Developer shaping new entrance to Coachella

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Terry Manley, 53, of Las Vegas, owner/developer of the La Entrada project near I-10 and Avenue 50 in Coachella, stands near the site where he hopes a freeway offramp will connect his project to the freeway. La Entrada is a development which will create a new eastern entrance to the Coachella Valley and to the city of Coachella. The project will include multi family, single family and city-within-a-city development for 20,000 residents. The project is tentatively scheduled to start in the year 2016.

The $1 billion vision urban planners KTGY have for Coachella holds potential to turn a 2,200-acre swath of sand, shrubs, creosote and outcrop-laden land into an eastern entrance to the Coachella Valley that is as dramatic as the wind turbine-studded entrance to the west.

La Entrada, a project by Las Vegas developer Terry Manley, could become a “city within a city” over 25 years.

“It’s a game-changer,” KTGY principal Ken Ryan said.

The ambitious plan for the proposed master-planned community that would take shape south of Interstate 10 above the All-American Channel calls for 7,800 single and multi-family homes, four schools, 900 acres of parks, recreation, sport fields and open space.

With 80-foot-wide pedestrian paseos, a lifestyle-center with retail and office space, restaurants, churches and hotels, La Entrada planners say the city of Coachella could see its population of about 42,000 grow by 30,000 people at build-out.

It could also bring other large-scale real estate development to tracts of land closer to the Salton Sea, one of which is called Travertine Point.

“There are two ways to develop,” Manley said, as the Las Vegas-based New West Communities principal maneuvered a four-wheel-drive vehicle over the undeveloped terrain as adeptly as a tie-man roping steer. “One way is to be reactive, and move on small pieces of land — to jump in and out of small deals to react to the economy of the day.”

“The other way is to get in position for multiple cycles.”

La Entrada falls into the latter category, Manley said, commenting: “When you look at population growth, and see that Riverside County has 2.3 million people right now, and is expected to double in 25 to 30 years, then, play with land maps, you quickly arrive at the conclusion that the east end of Coachella Valley will fill up.”

“For locations like this, you have to have a little bit of vision,” a pioneering spirit, a solid team and a lot of guts.

VISION

Manley, founder of Champion Homes of Nevada, was the master-planned community developer of the 230-acre Champion Village in Henderson and the 534-acre Iron Mountain Ranch in the northwest Las Vegas Valley before the recession of the late-1990s.

Forced into a Chapter 11 bankruptcy filing on the Iron Mountain project, Manley sold those assets in 2000 to a public builder. Iron Mountain became a top seller through 2004.

Today, New West manages and owns projects in Arizona, California and Nevada that include more than 9,000 fully entitled and 1,100 finished lots. Manley is part of a South 15 Airport Center team developing a large-scale, 170-acre industrial hub in the Las Vegas market with a new a FedEx distribution center.

Manley, who revealed plans to announce a 1,300-acre deal for a second master-planned community in a yet-to-be-disclosed location of Riverside County this spring, is also a developer and co-investor of The Residence Club at PGA West in La Quinta.

Built at the base of the Santa Rosa Mountains, The Residence Club is an alternative to vacation real estate — offering buyers a deeded, one-ninth fractional ownership of a $1.9 million villa. The 32-villa development is half-sold.

ENTRY POINT

Land for La Entrada was purchased by New West by Manley and a capital partner in July 2011 for $8.5 million, Manley confirmed, as part of a short sale-styled transaction with Fiesta Development of Corona.

Fiesta, already well into an environmental review process, became a victim of the burst housing bubble, Manley said: “Even if you were someone who was financially conservative by any measure, once 2008 hit, it made it hard to survive. They were unable to keep it in the downturn.”

When La Entrada came into view, New West was seeking large land opportunities to buy, reposition and develop over the long-term. “We scoped out prospective acquisitions in Phoenix and Las Vegas,” he said. “We decided on this.”

Beyond the stunning view, Manley sees La Entrada as an inextricable link to a more diverse economy that plays off the freeway interchange, spurs east end development and strikes an economic balance for the Coachella Valley.

ECONOMY OF SCALE

Bill Blankenship, executive officer of the Riverside County chapter of the Building Industry Association, said the economy has reached a point where developers are revitalizing projects like these.

“As the county expands its job base, places like that are going to make a lot of sense,” he said. “That’s what the developers are banking on.”

“We all know places like Indio and cities like Coachella will one day be cities of nearly 200,000 people or more. It would seem like a project there would be ideally located to serve Inland valley jobs as they are created, and allow reasonable alternatives to commute deeper into Riverside County.”

John Husing, an Inland economist, said the proposed La Entrada project is a definite sign the dormant residential construction industry is starting to look to a point when it will begin to build homes in bigger numbers down the road.

The economy will probably create about 35,000 jobs in 2014, offering some bounce-back to residential construction, Husing said.

“It won’t take us out of the hole, but it will get better,” Husing said. “That means this is a time when, if I’m in the residential construction business, I’m very definitely preparing for a time the market begins to return to normal.”

For 2014, Chapman University economists project the two-county Inland region will see 10,029 dwellings under construction: Permits for housing constructions for the entire two-county Inland region totaled only 8,981 in 2013, up from 6,034 the year before.

Those numbers are well off of the peak when rooftops sprouted en masse.

“There still is a way to go before we have enough normality for people to be willing to migrate to buy homes,” Husing said. “It will take the economies of Orange, LA and San Diego to get back to normal before action picks up significantly in the Inland region.”

“There is more activity going on in residential, but it’s up from an incredibly dormant period of four to five years,” said Fred Bell, a committee member of the Desert Valley Builder’s Association.

“The question now is, ‘Can the economy have enough job creation so people feel confident that it’s time to buy that house or make that move?’~”

DESERT DESIGN

La Entrada, which met with City Council approval in November 2013 and has finished its final environmental review without a California Quality Environmental Act challenge, won’t pop up overnight. KTGY urban planner Ken Ryan said La Entrada would be built in five phases through 2032.

“It is a logical, staged development as the market rebounds,” Ryan said, and it is designed to respond to the economy over time. “To not have a challenge speaks highly to the quality of our project and the caliber of our documentation,’’ Manley said.

Focusing on three village centers — a lifestyle center, civic hub and traditional neighborhood settings — La Entrada reserves nearly half of the acreage to open space and recreation.

Midway into the project, bedrock outcropping will add natural drama to the surroundings.

“It’s an inclusive project, not just for residents but others,” Ryan said. “Here, you’ll be able to live and recreate. It is freeway related, and it has an athletic complex that could include a stadium and allows for lodging or hotels.”

An 80-foot-wide pedestrian spine and native landscaping connects all the villages together.

An Andreas Canyon of Palm Springs area dweller himself, Ryan has affinity for the desert that is reflected in his master plan design for Agua Caliente Casino Resort & Spa of Rancho Mirage and Desert Willow Golf Resort of Palm Desert.

Desert Willow graced the cover of the Smithsonian magazine for its use of native plant material — and rock moldings that replicate the fan palm tree — in golf course design. “We got away from the sea of grass,” Ryan said. “Today, these design elements are frequently replicated elsewhere.”

When New West acquired La Entrada, Ryan penciled two golf courses out of the equation as a water conservation measure. He cut down the housing units, created a plan capable of accommodating up to 2,400 multi-family units and drew lines that responded to land forms in natural ways.

“Open space became the unifying element,” he said. “I have visited the desert since I was a 6-year-old, and appreciate it for its natural beauty. It’s a cherished place, so if you do planning correctly, and think about the landforms, it’s a project with sustainability.”

It is one that others will gravitate to, Ryan predicted.

CHALLENGES

“La Entrada is the largest single project for the Coachella Valley by far,” Coachella City Manager David Garcia said. “And it’s not something that will happen overnight.”

Now in engineering mode, New West is working on off-site improvements to prepare for the first, $70 million phase of preliminary construction. At the top of the list is an Avenue 50 and Avenue 52 connection through what is now an agricultural area into and through La Entrada.

Reservoirs, sewer, water and road designs — it includes a loop road to create a town center — are taking shape.

Engineers have been hired by New West to design an I-10 interchange at Avenue 50 to create a second gateway to Coachella — and an entrance to La Entrada — off the freeway, and ask the California Department of Transportation to expedite the construction plan.

But, there’s a hitch.

Other interchanges are in the construction pipeline: The Jackson Street interchange is expected to go out to bid in the first part of 2014 for a summer start. The Jefferson Street interchange, with a reconstructed fly-over, is up next.

ROADWORK

Tom Kirk, executive director of Coachella Valley Association of Governments, said the Avenue 50 interchange is part of a long-range plan, and it will be a critical part of the region’s infrastructure.

But there are no immediate plans to build the interchange at this time, he said.

CVAG transportation director Allyn Waggle said the interchange is at the planning and city level.

Conditions must be met before it would be considered, he noted, among them: bridge work over the All-American Canal.

The city of Coachella has a $25 million grade separation project in the works over a set of State Highway 86 railroad tracks and is working on a $26.4 million crossing funded over a whitewater channel to improve access into the site and the Coachella region, Garcia said.

“We are also working with CVAG to demonstrate traffic demand’’ for the $32- to $45.5-million freeway interchange.

If the I-10 interchange cannot be built by 2016, Manley said a main La Entrada entrance would be built at Avenue 50 — about where the agricultural fields begin.

WATER

California’s severe drought also poses challenges.

Developers say they are bracing for these ramifications to projects. The fact this is a ground-up development will give all parties time to use technology for water reuse and energy conservation that does not exist in the rest of the valley, Garcia said.

“The La Entrada has been in long-range plans for Coachella Valley Water District for 20 years, so when we acquired the land, we looked at it with a sharper eye toward efficiencies and water use,” Manley said. “I don’t know how you can be aware of water conservation today, and not have it as a short-list issue.”

New West has also given an indication it would participate in an imported water surcharge program, such as a fee-based program the city has yet to develop, to meet long-term residential water supply requirements, Garcia said.

The surcharge could take the shape of a development impact fee, currently estimated at $34 million.

“We have full buy-in to explore the option,” Garcia said.

VISION

Carving out new frontiers in the desert is not new to the Coachella Valley, as the 2009 California Homebuilding Hall of Fame inductee Richard Oliphant of Indian Wells can attest.

Coming to the region from Tucson in 1960, Oliphant developed one of the nation’s first golf course communities, Palm Desert Country Club. Later, his company created Indian Wells Tennis Garden and the Classic Club golf course along I-10 in Palm Desert.

Years before the downturn, Oliphant proposed a 900-acre master-planned development along Dillon Road, near the Coachella Valley Nature Preserve. But the vision for a new city with a world trade center, golf courses and trails drew protest from land conservancy proponents.

“Today, its raw land,” he said, sharing the anecdote to suggest, “There are always hurdles.’’

“As a developer, you have to think long-term: Houses will be built in the desert someplace, some time,” Oliphant said. “When they are, I’ve always advocated it’s better to do large acreage under one developer than dozens. You get better planning. It all integrates.”

It’s a risky business, Manley agreed.

CONSERVATIVE APPROACH

New West will take a “cautious approach” to all elements of construction, Manley said. “We are hewing to the fundamental strategy of making sure we are in strong capital position. As we all experienced in the downturn, it is being over-extended that can be fatal to a project of this size.

“It will be 2018 before you see the first house.”

Even as the SUV rambled over terrain where the desert floor had hardened from a sudden summer rain, Manley said his greatest triumphs occur when open land is shaped into living spaces.

“I prefer the realm of land entitlement and development,” he said.

Gazing across a ridge to a patchwork of artichoke, lettuce and onions growing about 1,000 feet below, Manley said New West is planning for multiple economic cycles.

But the importance of the freeway cannot be diminished. Nor can the project as a whole.

“Over the next 20 years, this desert will diversify. Now, it’s strong but singular — dependent mostly on winter homes. I see it growing into a place that is more of a primary community with a more diverse job base and economy.

“This valley started out with a handful of golf courses and places for people to come out of the fog on the coast. I don’t see mass exodus like we saw in the mid-2000s.